Thread: Short Sale question regarding my offer

Originally Posted by eregoz

Hello everyone,

I have a question about an offer I put up on a short sale and why me and my wife had the outcome we did. First of all a little background, we are first time buyers and started looking for a house in January. Since then we found 3 houses that we loved, but lost 2 to an all cash offers and 1 to an offer with higher asking price and less contingencies (we had 45 day escrow because our down payment was in a CD and they asked for less) . It's now very frustrating because we fall in love with a house and we get it taken away.

Now to my short sale question. 3 months ago we found a house that was perfect for us (it was a short sale), so since we had bad experiences with past offers we decided to offer 10k above asking price, and we've always offered 20% down.

The agent called us the next day saying that they were turning the papers to the bank with our offer and another offer. The other offer was 30% down and bellow asking price, but don't know by how much.

A few weeks later we were told that a negotiator had been assigned and it would take about 25 days to get an answer. Last Friday they called my agent to ask if we were still interested in the property (which we took as a good hint) and we said yes. Today we get the notice that our offer had been rejected and the bank chose the 30% down and less than asking price.

Why would the bank choose 30%down and lower than asking price over our 20% and 10k over asking price? I'm just curious.

Sorry if this was long, but our first time home buying experience is not turning out to be a good one for us. We thought it was going to be exiting and easy after all the talk that now is the time to buy, and "it's a buyers market". We are very frustrated and we get depressed each time we loose a home to another offer. If it makes a difference we are in southern California.

Thank you for your help,

You could have lost because:

-The other buyer had better credit or was stronger financially as evidenced by the higher down payment.
-The lender was afraid the house would not appraise for $10,000 more than asking price.
-The lender negotiated a higher price with the 30% down offer.
-The lenders rep is a 23 year old who was flipping burgers last week and doesn't know what they are doing.


Just because it is a buyers market doesn't mean you can waltz into the market and have everything happen just perfectly. Being in a buyers market means you will be saving a lot of money which is worth the effort you are exerting trying to buy a house.

There are a lot of houses for sale and more coming on the market all the time. There is rumor that a big batch of foreclosures will be coming on line soon. Keep at it and try not to get so emotionally attached to the house. It is just a pile of sticks and there is another one just like it or better around the corner.

The final outcome is you will end up with the perfect house at a great price.

Originally Posted by eregoz

Now to my short sale question. 3 months ago we found a house that was perfect for us (it was a short sale), so since we had bad experiences with past offers we decided to offer 10k above asking price, and we've always offered 20% down.

WHAT!! Your EARNEST was 20%?? Or are you talking about in the financing contingency?

If you are saying that the offer is contingent on financing, then there is a bunch of reasons, and no one of them is NOT that the Loss Mitigator is a 23-yr old "burger flipper." (A LM goes through intensive negotiation training, and the offer needs to be approved by the underwriters.)

Please let me know what the "20% down" means.

Originally Posted by eregoz

Why would the bank choose 30%down and lower than asking price over our 20% and 10k over asking price?

Far too many reasons...

1. The lender has done business with the buyer before (the buyer is an investor that has purchased several other properties from the lender before, and has proven to close.)

2. The second buyer is coming in with CA$H

3. The second buyer can close in 5 days (OR LESS) of acceptance, where yours was longer.

4. The lender caught wind that you have not owned before, and could be a risk in getting financed.

5. The lender was tipped off that you are a "newbie" because you offered MORE than what was asked for... And therefore since the BPO came in at $X, they knew that when your lender went for an appraisal, that the value would be less and your financing would have been rejected.

Oh, the list is endless...

Short selling is an art, not something that many can do without understanding all the details that go into getting one approved. You could get the training, if you wanted, but since you are just looking to get into a home, and not learn for investing purposes, I don't think that to be wise.

Maybe you can try your hand at REOs... It is a simpler game, if you are looking for bank properties. Otherwise, just keep looking until you find something, and you get the keys!

Hope that gives SOME insight!

Later!

just one question about your whole scenario.....

why not tell us just HOW you got all of the information on the other offer?

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Well our financing was 4.6% 30 year fixed with 1 point, and we are providing 20% down payment, the earnest check was 3% The agents told us that our offer looked strong and that we were the higher offer.

Thank you for your response everyone!